Hindustan Oil Exploration Company has provided a bank guarantee worth $1.16 million to address a claim from HEPI (Hindustan Energy Partners International). This development represents a significant financial commitment by the oil and gas exploration company to resolve outstanding obligations.

Bank Guarantee Details

The company has issued the bank guarantee to cover the $1.16 million claim from HEPI. This financial instrument serves as a security measure, providing assurance that the company can meet its financial obligations related to the outstanding claim.

Financial Implications

The provision of this bank guarantee demonstrates Hindustan Oil Exploration's commitment to maintaining its business relationships and ensuring operational continuity. Bank guarantees are commonly used in the oil and gas sector to provide financial security for various business transactions and contractual obligations.

This move indicates the company's proactive approach to addressing financial matters with its business partners, particularly HEPI, which appears to be connected to the company's exploration and production activities.

Company Operations

As an oil and gas exploration company, Hindustan Oil Exploration operates in the energy sector, focusing on crude oil and natural gas exploration activities. The resolution of financial claims through bank guarantees is a standard practice in the industry, helping companies maintain their operational licenses and partnerships while addressing outstanding obligations.

Hindustan Zinc shares extended their winning run for the second consecutive session, surging 4.5% as silver prices scaled fresh record highs amid renewed geopolitical tensions and a sharp retreat in the US dollar. The metal stock opened higher at ₹624.80 and maintained momentum throughout the session.

Stock Performance and Silver Contribution

The company's shares reached a day's high of ₹632.55, marking significant gains from recent lows. The stock has demonstrated strong performance, gaining 57% from August lows based on the current high levels.

Silver's importance to Hindustan Zinc's financial performance has grown substantially. The metal now contributes 41% to the company's earnings before interest and taxes (EBIT) in H1FY26, representing a significant increase from approximately 28% in FY23. This enhanced contribution makes the current silver price rally particularly beneficial for the company's operating performance.

Silver Prices Reach Record Highs

Silver prices achieved multiple record highs, crossing the ₹2.65 lakh mark during the trading session. The March delivery silver futures contract on MCX opened the week with a substantial jump of ₹12,665 per kilogram, reaching a fresh record high of ₹2,65,390.

In international markets, spot silver prices strengthened by 6% to reach a fresh peak of $84.58 per ounce. This contributed to an 18% surge in January, following a 148% increase in 2025.

Market Outlook and Price Targets

Motilal Oswal expects the silver price rally to continue in 2026, setting ambitious targets for both domestic and international markets. The brokerage maintains a "Buy on Dips" stance for silver throughout 2026.

The brokerage indicates that silver's strength is likely to be front-loaded in the first half of 2026 amid policy uncertainty and currency volatility. The continuation of the rally in the second half will depend on global growth cues, bond market stability, and monetary policy credibility.

Geopolitical Factors and Dollar Weakness

The safe-haven appeal of precious metals has been reinforced by multiple geopolitical developments. Tensions around China-Japan trade relations, US capture of Venezuela's leader, fresh tariff-related tensions, and a criminal probe into Federal Reserve Chair Jerome Powell have supported the rally.

Middle East tensions have also intensified, with anti-government protests in Iran's capital Tehran amid an internet shutdown and government crackdown. The US dollar fell significantly, with prosecutors opening a criminal investigation into Federal Reserve Chair Jerome Powell, adding to tensions with the administration.

The weakening dollar makes dollar-priced commodities cheaper for holders of other currencies, providing additional support to precious metal prices. Recent US jobs data delivered mixed signals on economic health, providing little clarity on the future path of Federal Reserve rate cuts.